Minor dilema

[tay666]

Ok. We will be filing a CH7 BK in the next couple months.

Back in Nov. I had to have surgery for a broken jaw.
The doctor was not a plan participant for my medical insurance through work. Though the insurance company did have them on the approved list. (doctor was 200+ miles away, and the only one willing to take on the very complicated surgery)
Anyway. Just got a statement in the mail today from the insurance company. Included in the statement was a check to me.
For some reason, certain bills, they send me a check and have me reimburse the doctor myself. Usually it is no big deal. $30-$50 a pop.
Well, this check is like $1300.

So, now I am wondering. Since this check is made out to me, would it be considered income?
It makes a huge difference as that is more than I bring home in a month. (I gross $1512 in 4 weeks).
Is there any way the trustee would even find out about it that I would have to explain it?
In the past, I have never gotten anything like a 1099 from the insurance company, but I don't think there has been more than about $300 in any one given year to this point.

I do not plan on depositing this in my bank account and writing the doctor a check. If anything I will cash it, and send a money order.
I plan on BKing the balance of the bill though. As the total bill is around $5500 just for the doctor. And the insurance is only covering this $1300.

Also at this point thngs are so tight, I am considering floating this check a while. Cashing it and using some of the money to help until our tax return comes in. Things are so bad at this point, I have no idea if I even have enough gas to get back and forth to work until payday on Friday. After the tax return comes in, we will be fine until my wife finishes school in April and goes back to work.

I had thought about just keeping the check. But figured if the trustee finds out about it, it would definitely be considered income.
But if I keep the statement, and a reciept for a money order for the same amount it would pretty much prove that the check was nothing more than a pass-through and I did not benifit from it.

Would that probably fly with the trustee?

What are others opinions on this situation?

[tay666]

No opinions on if this would be classified as income?

[arkienurse]

No opinions on if this would be classified as income?

well, not sure. I think since it is meant for payment to the doctor, it probably is not considered as income. I would just sign the check and take it to the doctor. Oh, wait. You said they are 200 miles away. Not sure if I would endorse a check and put it in the mail. Perhaps MO is the way to go.
So glad you don't live here. We only have one oral surgeon and one ent. Used to do simple arch bars for jaw fractures on a regular basis. But the ent started referring them out as he prefers not to do them, so we no longer do them.

[CindyLou]

hmmmm..this is a question for an attorney.

But maybe you could cash at a check cashing place to avoid any confusion and mixing with your current bank acct?

Or maybe cash it at the bank on which it was drawn if there is a local branch.

I think the only way it would be interpreted as income is if its put into your acct.....seems logical to me but this is not an easy answer.

[tay666]

That is what I was thinking.
Cash it for just cash.
Use cash to buy MO and mail to dentist (one I get an actual bill from him) Then keep the statement from insurance, MO reciept, and copies of bills together just in case the question comes up.



arkienurse - we actually have a bunch of oral surgeons around here.
But I had to go to Pittsburgh to find a maxillofacial specialist.
I was actually 3 breaks that occured in the same accident.
Broke at the chin, and both sides where the jaw attaches to the skull.
Ended up having to get one of those sides completely replaced with a steel implant as it completly shattered. (6+ hours under the knife)

[Minnymouth]

Cash it, purchase money order, send to dentist........KEEP RECEIPTS (including copy of check) for Trustee review if asked for it....

If Trustee treats it as income, he will take the money from the dentist and disperse among his crediors.

You will do your part correctly, then Trustee will do what he deems necessary.

If you cash the check, keep the cash to get by on, Trustee can dismiss your case and dentist can cause lots of problems also...

In the end you can discharge the dentist anyways probably....

Ask you attorney, he may want you to turn the check over to the Trustee (just like my Trustee demanded the insurance check for roof damages to my home, then I ended up PAYING for a new roof out of my pocket)....

Cover your butt.......... you don't want to do anything that looks shady on your part.....

P.S. Believe me, the Trustee cares NOTHING about who pays for your jaw getting fixed....... ANY MONEY is his that comes in during bankruptcy except maybe child support.... ss, etc

[tay666]

Minny.
Thanks for the input. But right now I am not in a BK. So I have no trustee or attourny.
We are planning on filing a CH7 within the next 2-3 months.
And I just want to cover my butt and iron out as many bumps as possible leading up to the BK.

As I said, I can't even send the payment yet, as I haven't even gotten the bill from the dentist yet. So I have no clue where to mail it, or who to make it out to. Should be soon, as bills from other related expenses are just now starting to roll in also (hospital itself, anesthesia, etc.)

Looks like I will have to use part of it just to get by.
Don't think I will have a problem with cashing ti today. Using maybe $100 of it until my tax return comes in in a little over a week. Then mailing off the money order when the bill finally arrives.

Good idea to make a copy of the check itself though. Hadn't thought of that. Just stuck it in my scanner an printed a copy for my records.

[Minnymouth]

Cashing it, using some of it for a week, replacing it with tax refund just might slide you by for right now. Especially since you haven't filed BK yet....

Just keep receipts of what you spend it for, same as your tax refund too, so when you do file you can tell the Trustee where it went if he asks.............and he probably will..... their like that...

[tay666]

Oh yeah. I know, I have heard the stories.
My return will be direct deposited in my checking acount.
All use of the money will be by check or debit card, so there will be a perfectly clear paper trail of where the money goes.

And I am sure all of them will fly with the trustee.
Title and plates to car (given to me by my mother since we have no vehicle now, value less than $1000)
Insurance for the car.
Battery and tires for the car.
$100 payments to 3 of my wife's doctors who she does not want to loose.
Cheap car for my wife, as well as plates and title work.
New eye exam and glasses for my wife. It has been over 5 years and she has been getting terrible head-aches for a long time now. So, she is way over due.
BK attourney.

Don't think he can object to any of those

BTW Minny. Since I know you had an asset case. Could you chime in on this thread?

http://www.bkforum.com/showthread.php?t=20906

[FreshLikeADaisy]

Tay, you got some really good advice here, but I would like to reiterate one point: be sure that whatever you received *ends up* at the doctor's. So if you cash it and there are check cashing fees, plus maybe you use some to get gas and eat for the next two weeks, just be aware that all $1300 of it needs to end up in the doc's hands. It's not just a question of bk fraud, but insurance fraud. If you plan to do that, I see no problem with using the check to pay your expenses until your refund arrives, it's only a problem if you don't transfer it all to the doc in the end. Good luck!!!

[Minnymouth]

Absolutely, the dentist MUST receive the amount from same amount from you whether you cash the check or not...... keep receipts of money orders, etc....

[tay666]

Trust me. I plan on sending them exactly what I received.
I will also be mailing it with deliver confirmation return reciept requested.
That way I can prove it got to them in case something should go wrong.
I of course will pay any costs for the money order and mailing out of my own pocket.
I don't want there to be any question of what happened to that money.

I plan on going into this with as few flags as possible.
Hopefully we can sail through most of it just like any other case.